Stanbic IBTC Bank PLC and its holding company, Stanbic IBTC Holdings PLC, have retained their AAA national ratings by Fitch Ratings, the global leader in credit ratings, reaffirming their strong fundamentals and stability, especially the ability to meet their financial commitments as they fall due.
In the report issued recently, the two institutions recorded AAA(nga) national long-term ratings, which provides a relative measure of creditworthiness for rated institutions in Nigeria.
The AAA national rating is assigned to an institution with the lowest relative risk.
In arriving at the rating for Stanbic IBTC, Fitch took account of the strong parental support from Standard Bank Group, to which Stanbic IBTC Holdings PLC belongs, as the group provides support in such areas as staff training, provision of information technology upgrades and best practice processes, as well as strong corporate governance practices, a statement from the bank said Monday.
â€œStanbic IBTC Holdings PLCâ€™s (SIBTCH) National Ratings are based on potential support from its parent, South Africaâ€™s Standard Bank Group Limited (SBG/Group; BB+/Stable), if required.
â€œOur view of institutional support considers SIBTCHâ€™s strategic importance to SBG, high levels of integration between the parent and the subsidiary, as well as SBGâ€™s majority shareholding in SIBTCH (53.2 per cent through Stanbic Africa Holdings Limited),â€ the statement quoted Fitch as stating.
Stanbic IBTC Holdings PLC and Stanbic IBTC Bank received similar ratings in 2016 and February 2017 after a thorough examination of its credit process and financial results.
The bankâ€™s diversified loan portfolio was reviewed, with its impact on the various sectors of the economy taken into account.
â€œOne of SIBTCHâ€™s main strengths is its diversified earnings. Non-interest income generation is high and underpinned by fees and commissions and trading income.
â€œLoan impairment charges are high, but manageable in the context of strong earnings. Costs are well controlled. As a result, profitability metrics are healthy,â€ Fitch added.
In its report, the rating agency also reviewed the capital adequacy of Stanbic IBTC in compliance with regulations and concluded that it was very strong and compared favourably against peers. â€œFitch expects these levels to be maintained.â€
The liquidity position of Stanbic IBTC was reviewed and its ability to meet foreign currency obligations as they fall due.
The group was certified as having â€œgood funding profile and very good liquidityâ€ as customer deposits grew strongly by 13 per cent in the first half of 2017 with the bank rolling out new delivery channels.
â€œBalance sheet liquidity is underpinned by large volumes of government securities. Additionally, SIBTCHâ€™s loans/deposits ratio at 62 per cent is one of the lowest among peers.â€
Chief Executive of Stanbic IBTC Holdings PLC, Mr. Yinka Sanni, said the ratings were a clear testament to the financial institutionâ€™s strength, strong leadership and the unyielding support of its parent company.
He reiterated Stanbic IBTCâ€™s commitment to the Nigerian market and pledged that it will continue to provide support to all sectors of the economy in order to keep moving individuals and businesses forward.
â€œWe are elated by this validation of our strength. This will help to boost our drive to build a strong end-to-end financial solutions institution that offers bespoke products and services to our clientele.
â€œOur commitment to supporting the attainment of Nigeriaâ€™s developmental aspirations remains resolute,â€ Sanni said.
Stanbic IBTC Holdings PLC is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management.
Stanbic IBTC belongs to the Standard Bank Group, the largest African financial institution by assets. It is rooted in Africa with strategic representation in 20 countries on the African continent.
Standard Bank is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.